A Research On The System Of Commercial Banks Market Withdrawal Supervision

A complete financial supervising system is the effective combination of the supervising system of supervising to the access to mark of banking, market operation discretion supervising and market withdrawing supervising, among which the supervising system of market withdrawal is a significant constitute of modern financial supervising system. Under the market economy system, commercial banks may face and fall into difficult situations due to various reasons and the number of the aforementioned cases tends to increase in the previous years. In the event that the supervising authority fails to handle such cases in a timely and efficient manner, the rights and interests of the depositor and the other debtor will be negatively affected and the "dominoes effect" thereof may be harmful to the safety and stability of the whole financial system which deviate from the objectives of the financial supervising system. As such, the research on the supervising system of market withdrawal of commercial banks is of theoretical importance.Traditionally, compared with the research on the supervising system of the access to market of banking and market operation discretion supervising, the research on that of market withdrawal of commercial banks has been of less importance. Currently, rules relating to the supervising system of market withdrawal can be found in some finance laws and regulations such as rules regarding the disbandment, the dissolution, and the bankruptcy. However, such rules are not centralized and systemic resulting in some conflicts and discrepancies among them. Besides, these rules are mostly too principle and lack practical nature. There are also some areas that yet to be covered by the rules. With the reformation of PRC's financial system furthers on, the listing of the four state owned commercial banks has increased their competitive competency and hence brought forward more challenges to the medium and small sized commercial banks. Additionally, the looser controlling system of PRC's finance market subsequent to the opening up of PRC's finance market upon the expiration of the five year intermediary period after PRC's joining the WTO, more and more foreign financial institutions enter into the PRC finance market by either setting up presence or becoming the shareholder of domestic commercial banks: This worsens the situation for the abovementioned medium and small sized commercial banks. Some of them are near the edge of bankruptcy and many of them are in the process of being merged or acquired. Based on the aforesaid, the research on the supervising system of market withdrawal of commercial banks is of practical importance.The article begins with the general theory of the supervising system of market withdrawal of commercial banks, it goes on to state the theoretical basis of the system, it further analyses the value of the system and introduces the legal supervising system of market withdrawal of commercial banks of major western countries. In accordance with the above and the laws and practice of PRC, the article summarizes the contemporary system of the legal supervising system of the market withdrawal of commercial banks in the PRC and reviews several prevailing issues. It brings forth the theory on the establishment and improvement of the system with reference to the experience of the western countries and the practice of the PRC.The author is of the view that to construct the legal supervising system of market withdrawal of commercial banks, some basic principles have to be established first. These include the supervising principle, the principle of proper application of laws, the principle of stability, the principle of protecting the rights and interests of the depositor and the investor, the principle of quasi market system and the principle of assignment and compatibility of financial authorities. Secondly, the supervising authority has to be ascertained and the presiding institutions with its responsibilities have to be set out. Thirdly, the article describes the basic procedures for the supervising system of market withdrawal and explains the content of the supervising system such as the receiver system, the disbandment system, the mergers and acquisition system, the dissolution system and the bankruptcy system. Finally, the article points out that four related ancillary measures have to be established and refined including the danger alarm system, the deposit insurance system, the lender of last resort system, and the guarantee system of the rights of the creditors.